Toshiba Falls to Three-Year Low on Chip Production Cut

The output cut is Toshiba’s first since 2009, as demand for storage cards used in mobile devices including cameras and USB memory slumped amid economic weakness in Europe. Photographer: Kiyoshi Ota/Bloomberg

July 24 (Bloomberg) -- Toshiba Corp. fell to its lowest in
more than three years in Tokyo trading after saying it will
reduce production of NAND flash memory by 30 percent as weakened
demand for data storage devices led to a glut.

Toshiba, the world’s biggest maker of flash memory after
Samsung Electronics Co., declined 5.4 percent to 261 yen, the
lowest since March 2009, at the close on the Tokyo Stock
Exchange. The Nikkei 225 Stock Average fell 0.2 percent.

The reduction will take effect at Toshiba’s Yokkaichi
factory in Japan today, the Tokyo-based maker of chips, consumer
electronics, aerospace components, nuclear reactors and home
appliances, said in a statement. It has no plan to change its
earnings forecasts because of the move, Toshiba said.

The output cut is Toshiba’s first since 2009, as demand for
storage cards used in mobile devices including cameras and USB
memory slumped amid economic weakness in Europe. Global
personal-computer shipments dropped 0.1 percent in the second
quarter from the same period a year earlier, market researcher
Gartner Inc. said July 11.

“This move will help to reduce inventory in the market and
improve the overall balance between supply and demand,” Toshiba
said in the release. The market for flash memory may improve
this quarter on rising demand for PCs and smartphones, the
chipmaker said.